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Mutual Fund Compensation Disclosure

At LPL Financial ("LPL") we receive compensation from the mutual fund families that are available to our brokerage customers. These payments include commissions (sometimes referred to as "loads"), trailing commissions (including so–called 12b–1 payments), payments for administrative services that we provide, and payments made in connection with programs that support our marketing and sales force education and training efforts, such as our annual national sales and education conference and other conferences (referred to here as "Sponsorship Programs').

Sponsorship Programs

The mutual fund families that participate in the Sponsorship Programs are listed below. The payments made under the Sponsorship Programs are calculated based upon the assets that are held at the participating mutual fund family, including any 529 college savings plan assets, but excluding assets held in fee–based advisory programs at LPL. LPL may receive compensation of up to 0.15 percent of the assets held at the mutual fund family. For example, if you held $10,000 dollars with a participating mutual fund family for one year, LPL could receive a payment of up to $15 from the mutual fund sponsor. LPL Financial advisors do not receive any part of these payments.

LPL also assesses financial advisors a $23 ticket charge for automated purchases of mutual funds. Generally, the mutual fund families that participate in the Sponsorship Programs subsidize some of these ticket charges. As indicated on the chart below, in some cases the ticket charge is waived completely, and in other cases it is discounted. Every mutual fund offered by LPL also may be purchased without a ticket charge by processing the transaction with a check and application sent directly to the mutual fund company. We believe that these programs do not compromise the advice your financial advisor gives you.

*Ticket charges for purchases of mutual funds offered by these families are paid for by the mutual fund sponsors.

Purchases of mutual funds offered by the mutual fund families above without an asterisk are subject to reduced ticket charges.

Commission Information

When LPL receives a commission from a mutual fund underwriter, the underwriter usually retains a portion of the commission to compensate the underwriter for the distribution services it provides. In some cases, a mutual fund's underwriter will decide not to retain any of the commission and will pay all of the commission to LPL. In these cases, because LPL generally pays our financial advisors the same percentage of any commission we receive, your financial advisor may receive extra compensation for selling a mutual fund that does not retain any of the commission.

The underwriter of the Optimum Funds pays the entire commission for sales of those mutual funds to its selling broker/dealers, including LPL. Consequently, for all Optimum Market Portfolios accounts funded prior to December 1, 2007, LPL had decided to re–allow to our financial advisors additional compensation for sales of these funds to support the additional client service financial advisors provide in connection with the Optimum Funds.

Trailing Commissions Information

Many mutual funds pay LPL trailing commissions (including so–called 12b–1 payments). LPL usually retains a portion of these fees as compensation for services we provide, and pays the remainder to our financial advisors, as compensation for the services that they provide to their clients. LPL Financial advisors do not receive any portion of any 12b–1 payments made on cash swept into money market funds offered by DWS Scudder Investments. In the case of the Optimum Funds, LPL has decided to re–allow to our financial advisors all of the trailing commissions paid by these funds that are held in Optimum Market Portfolios accounts funded prior to December 1, 2007.

Money Market Mutual Fund Automatic Cash Sweep Program

For accounts that are ineligible for the Insured Cash Account ("ICA") program as the automatic cash sweep vehicle, LPL offers an automatic cash sweep money market mutual fund program. The money market mutual fund automatic cash sweep program sweeps uninvested cash daily into taxable and tax–exempt money market funds offered by DWS Scudder Investments. LPL may receive compensation of up to 0.15 percent of the assets invested in DWS Scudder Investments money market funds. LPL Financial advisors do not receive any portion of this payment.

Optimum Funds

LPL serves as a sub–services agent to the Optimum Funds, providing sub–accounting and shareholder recordkeeping with respect to Optimum Fund shares. LPL receives compensation of 0.25 percent on assets held at LPL for these services. As an investment consultant to Delaware Investments, the investment advisor to the Optimum Funds, LPL also provides investment consulting services to the advisor of the Optimum Funds. As compensation for these services, LPL receives an investment consulting fee of 0.25% on all Optimum Fund assets. LPL Financial advisors do not receive any portion of these payments. For more information regarding our investment advisory activities, please consult the firm's Form ADV.

More Information

Information about a mutual fund's fees and expenses may be found in the fee table located in the fund's prospectus. Also, the fund's statement of additional information contains important information that you may wish to read.

Additional Compensation to LPL Financial

LPL receives networking fees from certain mutual funds for fund positions on our platforms. Other sources of compensation are disclosed below.

Insured Cash Account

Under the ICA program, available cash balances (from securities transactions, dividend and interest payments and other activities) in your eligible accounts are automatically deposited into interest–bearing Federal Deposit Insurance Corporation insured deposit accounts ("Deposit Accounts") at one or more banks or other depository institutions. Interest rate tiers on the Deposit Accounts vary based upon the value of the eligible assets you maintain in your eligible accounts. Each bank pays LPL a fee equal to a percentage of the average daily deposit balance in your Deposit Accounts at the bank. The fee paid to LPL may be an annual rate of up to an average of 200 basis points as applied across all Deposit Accounts taken in the aggregate. In our discretion, LPL may reduce our fee based upon the varying interest rate tiers. The amount of fee received or waived by LPL will affect the interest rate paid by the bank on your Deposit Accounts.

Variable Annuity Compensation Disclosure

At LPL we receive compensation from the issuers of the annuities that are available to our brokerage customers. The compensation includes commissions, trailing commissions, and may include payments for administrative services that we provide, such as access to networked insurance contract data on the firm's systems and payments made in connection with programs that support our marketing and salesforce education and training efforts, including our annual national sales and education conference and other conferences (referred to here as "Sponsorship Programs").

Sponsorship Programs

The variable annuity issuers that participate in the Sponsorship Programs are listed in the chart below. One benefit of the variable annuity sponsorship program is that your Financial Analyst may receive LPL Financial Research recommendations for certain annuity participating sponsors to help determine which sub–accounts within the variable annuity may help you meet your investment goals. LPL Financial Research does not, however, make recommendations for specific variable annuity contracts.

The payments made under the Sponsorship Programs are calculated based upon the assets that are invested in the variable annuity contracts, excluding assets held in fee–based advisory programs at LPL. LPL may receive compensation of up to 0.15 percent of the assets invested with a participating variable annuity sponsor. For example, if you held $10,000 dollars with a participating variable annuity sponsor for one year, LPL Financial could receive a payment of up to $15 from the variable annuity sponsor. LPL Financial advisors do not receive any part of these payments. We believe that these programs do not compromise the advice your financial advisor gives you.

Marketing and Sales Support for Optimum Annuity Portfolios (OAP)

LPL provides marketing and sales support for OAP products and receives a marketing support services fee (as well as an asset–based fee). LPL Financial advisors receive a portion of this fee, so your financial advisor may receive greater compensation for selling this product than for selling other variable annuity products.

More Information

Information about a variable annuity's fees and expenses may be found in the fee table located in the annuity contract document.

Fixed Annuity Compensation Disclosure

At LPL, we receive compensation from issuers of fixed annuities that are available to our brokerage customers. The compensation includes commissions, trailing commissions, and may include payments for administrative services that we provide, and payments made in connection with our marketing and sales–force education and training efforts, including our annual national sales and education conference and other conferences. The payments made by fixed annuity sponsors include payments that are based upon assets held at the sponsor, excluding assets held in fee–based advisory programs at LPL. LPL may receive compensation of up to 0.25 percent of the assets held at the fixed annuity sponsor. For example, if you held $10,000 dollars with a sponsor for one year, LPL could receive a payment of up to $25 from that sponsor. These payments do not affect your premiums, and LPL Financial advisors do not receive any portion of these payments.

Life Insurance Compensation Disclosure

At LPL, we receive compensation from issuers of life insurance contracts (universal, variable universal, whole life and term) that are available to our brokerage customers. The compensation includes commissions, trailing commissions, and may include payments for administrative services that we provide, and payments made in connection with our marketing and sales–force education and training efforts, including our annual national sales and education conference and other conferences. LPL may receive compensation in a range of 5 to 10% of first year commissionable premiums for marketing, training and supporting distribution of life products offered through LPL as a broker/dealer, and of 10 – 25% of first year commissionable premiums to support the additional case management services that LPL provides for products offered through LPL Financial 's general agency. LPL may also receive additional compensation from carriers whose aggregate sales exceed premium thresholds specified in selling agreements. These payments do not affect your premiums, and LPL Financial advisors do not receive any portion of these payments.

Variable Universal Life and Fixed Life Carriers

American National Insurance Company
AXA Financial
The Hartford
Jackson National Life Insurance Company
John Hancock Life Insurance Company
Lincoln Financial Distributors, Inc.
MetLife Investors Insurance Company
Nationwide Life Insurance Company
New York Life Insurance Company
Pacific Life Insurance Company
Penn Mutual Life Insurance Company
Phoenix Life Insurance Company
Sun Life Financial Distributors, Inc.

Third Party Investment Advisors

LPL may enter into marketing services agreements with independent third party investment advisors, pursuant to which LPL provides marketing services on behalf of the third party investment advisor and receives compensation for such services. Third party investment advisors that have engaged LPL to provide such marketing services have greater access to LPL Financial advisors. LPL Financial advisors do not share in this marketing services compensation. Also, in some cases, the third party investment advisors may pay additional marketing payments to LPL and/or LPL Financial advisors to cover fees to attend conferences or reimbursement of expenses for workshops or seminars.

Invest in Others Charitable Foundation

In 2006, LPL created a charitable foundation to directly support, among other things, our financial advisors' local charitable interests. The foundation was established by LPL Financial Holdings, Inc., our parent company, and accepts contributions from LPL employees and product sponsors. Some contributing sponsors also participate in our marketing and sales force education programs. LPL Financial advisors can make donations to the charities of their choice and submit a request for a matching contribution from the Foundation, up to $250 per year per advisor. Charities receiving donations must be 501(c) 3 non–profit organizations under the Internal Revenue Code. Contributing sponsors were recognized at our 2006 National Conference and on LPL's website, but do not otherwise receive any gifts or services from the contribution. LPL Financial advisors do not receive any gifts or services from the contribution.